The annual meeting of the International Monetary Fund (IMF) and the World Bank took place this week in Washington, D.C., where Luxembourg was represented by Minister of Finance Gilles Roth.
The 2024 meeting occurred amid global uncertainties with ongoing conflicts in Ukraine and the Middle East, as well as tensions over Taiwan’s independence.
Meanwhile, numerous emerging economies are striving to counterbalance the political and economic influence of the United States and Europe.
The IMF’s analysis indicated that the global West, particularly the Eurozone, still faces significant internal challenges. Although inflation has been curbed, economic growth remains stagnant.
Minister Roth emphasised that stimulating growth is the key objective for the new EU Commission. He argued that public investment is essential but also highlighted the need to reduce bureaucratic hurdles in Brussels.
“We must promote private investments, especially in new technologies,” Roth stated. For Luxembourg, this primarily involves the fintech sector and related banking and financial services, Roth said.
The Minister also underscored the importance of unified regulations to prevent Europe from falling behind in innovation, particularly in comparison to the US, China, and other Asian economies.
The IMF also raised concerns about national debt levels, noting that some countries are now spending more on debt servicing than on education or healthcare. Roth cited Germany and France as examples of countries grappling with high debt burdens.
This issue remains a priority, according to Roth, who affirmed that the Luxembourg government is on the right track in terms of budgetary discipline, reducing inflation, boosting purchasing power, and maintaining competitiveness.
Minister Roth reported holding approximately 40 meetings with senior executives of US financial institutions operating in Luxembourg, including fund managers, banks, and insurance and reinsurance firms. He noted that these executives “welcomed” the government’s initiatives aimed at enhancing competitiveness.
Roth assured that nearly all of these institutions plan to expand their Luxembourg operations which he added, will benefit the country’s tax revenues over the medium and long term.
Addressing national debt, Roth clarified that the government’s priority is not merely the debt-to-GDP ratio but maintaining Luxembourg’s Triple-A credit rating.
